Long-term state budget fix

The state Senate took a major step toward greater fiscal responsibility this week by approving a bill to limit the effects of sharp economic downturns on state budgets in years to come. Had the plan for spending caps and a special reserve already been in place, state government's current financial difficulties would have been mitigated.

The proposal, recommended by Senate President Pro Tempore Glenn McConnell, would put a portion of any new revenues into a "rainy day" fund to offset tough budget years like 2010.

Sharp declines of state revenue in the last two years have demonstrated the folly of failing to plan for downturns in the budget process. The House recently dealt with the crisis firsthand as it made sharp cuts to further accommodate a $2 billion loss of revenue since 2008. The Senate will begin work on the budget this month.

Sen. McConnell's long-term solution would put 25 percent of new revenue into what is termed a stabilization account from which the state could draw when boom times turn bust. That also would serve as a spending restriction to limit government growth.

"By evening out our spending, there won't be pressure to overspend when times are good or have to cut services to the bone when times are bad," Sen. McConnell explained.

Ultimately, Sen. McConnell hopes that the voters will have an opportunity to formalize the budget restrictions in the state Constitution. A vote on that proposal fell just short of the required two-thirds majority, but the Senate is expected to reconsider the matter this month.

South Carolina has experienced brutal cuts in essential services over the last two years, and the state's budget woes are expected to continue into 2011.

The Legislature has closely observed the ugly consequences of plummeting revenue on state employees and operations. It should approve a budgetary system that will limit future feast-or-famine cycles.